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Gemtek: Service leads hardware development
By Weili Lin 2014-09-23
Gemtek, a leading hardware manufacturer of telecom and wireless broadband solutions, has been shifting its role in the smart home industry from a hardware supplier to software and service provider.
The Internet of Things (IoT) is expected reinvent the world. However, the gap between various hardware offerings has narrowed in both network communication and smart home industries, making it increasingly difficult for device makers to differentiate products solely through hardware improvements. Cloud services have become the next frontier. Gemtek believes software and services will take the lead role in the coming years, shaping the development of hardware.
Kevin Yang, Executive Board of Director of Gemtek, believes that maintaining competitiveness in the space will rely on the ability to develop reliable and innovative software solutions and cloud services, rather than merely offering hardware solutions. This will be especially evident in the smart home industry.
“Hardware devices by themselves cannot control the smart home—software and services do,” Yang said. He thinks each connected device is itself a small gateway that links to other devices, and smart home will be integrated and controlled by cloud platforms, not a single home gateway. The company predicted this trend eight years ago and began to develop its cloud services. Today, the company helps its customers develop, deploy, maintain and operate cloud platforms.
FOR HARDWARE, IT’S ALL DOWNHILL FROM HERE
While Taiwan companies are best known for their manufacturing prowess, it is not enough to stay relevant in today’s and tomorrow’s smart home market. Yang believes offering total solutions that integrate hardware, software and cloud services will help them stay competitive in an increasingly crowded market. He also sees hardware makers like lock manufacturers struggling to become service providers to establish value-added business models and increase recurring revenue. As increased competition and aggressive pricing strategies continue to reduce profitability for hardware manufacturers, becoming a service provider is one way to stay ahead of the game. The smart home market is fragmented in Taiwan in terms of hardware supply; to capture significant market share, integrating services and hardware is a key for future growth.
When it comes to the smart home industry, Taiwan makers need to realize that hardware is simply not enough. “Companies that emphasize hardware manufacturing are seeing their share prices continuously decline. In contrast, those focusing on software and services, such as Amazon and Google, see better stock performance,” Yang said.
GEMTEK FORMING A STRONG SMART HOME LINEUP
Gemtek’s revenue is generated from three sources: hardware manufacturing, software and cloud service solutions, and maintenance and operation of cloud platforms.
Gemtek offers both software services and hardware products, such as network cameras, smart plugs and irrigation systems. Network cameras and smart plugs are the company’s two largest smart home product lines. Yang indicates that single-purpose standalone DIY products sold in retail channels currently lead the smart home market in terms of sales volume.
As for software and cloud services, Gemtek offers integration services to smart home device manufacturers who need to deliver customized cloud services to their customers, but do not have the know-how or resources to build their own clouds. For example, one of Gemtek’s cloud service solution targets companies that develop Internet-connected doorbells or doorphones. These companies can integrate Gemtek’s solution to allow users to receive notifications on their smartphones and grant access remotely. Gemtek also provides an SDK (Software Development Kit) and APIs (Application Programming Interface) that make the integration process easier and quicker.